M.Video-Eldorado Group is the largest retailer of electronics and household appliances in Russia. It includes the
brands M.Video, Eldorado, as well as the marketplace Goods. As of June 30, 2019, the Group owns 490 stores under the
M.Video brand, 478 stores under the Eldorado brand and 9 m_mobile stores in more than 200 cities of the Russian
Federation.The number of employees is more than 31 thousand people strong.
Strengthening the Group's position in a highly competitive market, ensuring business sustainability,
optimizing costs and ensuring the synergy effect from the merger, as well as creating a long-term
The merger of two large retail chains — M.Video and Eldorado — required a complete transformation of
management processes. The management faced the task of uniting most of the back-office (internal)
processes, while preserving the independence and competition of the front-end (visible to the buyer). A
unique approach to the market was implemented: one company - one business model - two brands. Both
networks retain competing retail both online and offline, gaining access to a wider customer audience
and the synergistic effect of centralizing the back-office functions (logistics, commerce, finance, HR).
In February 2019, the two operating companies of the group of LLC MVM and LLC Eldorado legally merged
and switched to a single enterprise resource planning system based on SAP. In terms of back-office
processes, Eldorado has completely switched to the business model adopted in M.Video. The processes of
M.Video were adapted for the management of two brands.
The business case of the merger of the two companies was based on a reduction in operating costs, an
increase in revenue and profitability.
Upon completion of transformation, one legal entity manages two independent brands (M.Video, Eldorado),
each brand has independent front-end solutions which are based on their own IT solutions: websites,
trading systems, including a mobile application for employees m_RTD and CRM systems. Each brand also has
its own marketing strategy and assortment. Both brands are supported by combined back-office functions
such as logistics, commerce, finance, human resources, which are based on a common IT system created on
the basis of the M.Video platform.
Synergy effect of the merger
A unified system for planning and managing the product matrix, warehouse facilities and supply chains for both brands was created. In addition to outsourcing, the warehouse management model includes its own warehouses. Warehouse operations are automated based on SAP EWM. Also, an in-house service unit for delivery and installation has been added to the integrated logistics circuit. The functionality of the service unit has been expanded to two brands; its work is automated on the basis of SAP ERP.
In the field of financial reporting, a new, general accounting methodology has been developed that supports a new management model with two brands. Uniform revenue accounting rules as well as planning and cost accounting rules were formed. Also, within the framework of the financial unit, a single procurement function was created (for non-commercial procurement), which works according to a single process for both brands. The introduction of this function allowed to achieve the desired effect due to the consolidation of needs.
The function of commercial procurement is also combined in terms of processes, while category managers independently create an assortment of each of the brands. The need is consolidated at the level of purchase orders. To support the processes of the commercial department, business planning systems based on SAP BW were finalized.
The HR solution is adapted to work with two retail chains and a single central office, in total about 31 thousand people. Within the framework of the project, the organizational structures of brands, goal-setting systems, motivation, etc. were agreed and brought to uniform principles. SAP HR system was finalized to maintain the general structure of the company, personnel administration, payroll.